1. The Lark Company purchases a warehouse on December 31, 2014 for $130,000 (which includes all capitalizable costs). They put the warehouse into service on January 1, 2015, assigning it a useful life of 16 years and a salvage value of $6,000. Enter your answers below in whole dollars without a $ sign (e.g., xxx).

   1. Calculate the depreciable cost of the warehouse.
   2. Calculate the annual depreciation expense that Lark must recognize for the warehouse over the next 16 years.
   3. Calculate the net book value of the warehouse as of December 31, 2020.
   4. As of December 31, 2020, how much total additional depreciation expense should be recognized over the remaining useful life of the warehouse.

QUESTION 3

1. Scrimshander, Inc. is a shipping company, transporting goods using cargo ships. On January 1, 2017, the company purchases and puts into service a cargo ship costing $10,000,000. The expected useful life of the ship is 25 years, and the salvage value is $1,000,000. Enter your answers below in whole dollar amounts without a $ sign.

   1. Calculate the annual depreciation expense that Scrimshander must recognize on the cargo ship over the next 25 years.
   2. Calculate the net book value of the cargo ship as of December 31, 2019.
   3. Calculate the net book value of the cargo ship as of December 31, 2041.
   4. Assume that Scrimshander continues using this cargo ship throughout 2042. How much depreciation expense should Scrimshander recognize for that year?

QUESTION 4

1. Cullumber Company owns delivery equipment that cost $49,700 and has accumulated depreciation of $24,800 as of July 30, 2020. On that date, Cullumber disposes of this equipment. For parts b - d below, enter D for debit or C for credit in the first box and the amount in the second box.

   1. What is the net book value of the equipment on July 30, 2020?
   2. Assume Cullumber scraps the equipment as having no value on July 30. What is the gain or loss, if any, that Cullumber should recognize?
   3. Assume Cullumber sells the equipment for $37,200 cash on July 30. What is the gain or loss, if any, that Cullumber should recognize?
   4. Assume Cullumber sells the equipment for $18,000 cash on July 30. What is the gain or loss, if any, that Cullumber should recognize?

QUESTION 5

1. Victor Mineli, the new controller of Carla Vista Co., has reviewed the expected useful lives and salvage values of selected depreciable asset categories at the beginning of 2017. Here are his findings:

   Category Date Historical Accum. Useful Life (Years) Salvage Value

   of Asset Acquired Cost Deprec. Original Proposed Original Proposed

   Building 1/1/2009 $736,500 $136,000 40 48 $56,500 $36,700

   Warehouse 1/1/2012 145,000 27,710 25 20 6,450 4,400

   All assets were placed into service on their acquisition dates and are depreciated by the straight-line method. Carla Vista Co. uses a calendar year in preparing annual financial statements. Note that Proposed useful life is a revised estimate of total life, not remaining life. Enter all answers in whole dollar amounts without a $. If rounding is necessary, round to the nearest whole dollar (e.g., xxx).

   1. Using the original values, how much annual depreciation expense did Carla Vista recognize for the Building in 2016?
   2. Assume that management has agreed to accept Victors proposed useful life change for the Building, but decides to retain the original salvage value estimate. How much annual depreciation expense will Carla Vista recognize for the Building in 2017?
   3. Now assume that management has agreed to accept Victors proposed changes to both the useful life and the salvage value of the Building. How much annual depreciation expense will Carla Vista recognize for the Building in 2017?
   4. Using the original values, how much annual depreciation expense did Carla Vista recognize for the Warehouse in 2016?
   5. Assume that management has agreed to accept Victors proposed useful life change for the Warehouse, but decides to retain the original salvage value estimate. How much annual depreciation expense will Carla Vista recognize for the Warehouse in 2017?
   6. Now assume that management has agreed to accept Victors proposed changes to both the useful life and the salvage value of the Warehouse. How much annual depreciation expense will Carla Vista recognize for the Warehouse in 2017?

QUESTION 6

1. Lake Company, organized in 2017, has the following transactions related to intangible assets in that year. Lake Company uses the calendar year for financial reporting.

   1/1/17	Purchased patent (8-year life)	$560,000
   4/1/17	Purchased trademarks (indefinite life)	360,000
   7/1/17	Purchased copyright on artwork; expiration date 7/1/2037	440,000
   9/1/17	Research and development costs	185,000

   Enter your answers below in whole dollars without a $ sign (e.g., xxx).

   1. How much expense will Lake Company recognize in 2017 due to the purchased patent?
   2. How much expense will Lake Company recognize in 2017 due to the purchased trademarks?
   3. How much expense will Lake Company recognize in 2017 due to the purchased copyright?
   4. How much expense will Lake Company recognize in 2017 due to its Research and development?
   5. Based on the above, what is the net book value of total intangible assets that Lake Companys balance sheet will show on Dec. 31, 2017?